Idaho Tax Credit: One Big Beautiful Bill Act Details

Idaho Governor Brad Little signed House Bill 559 into law on Wednesday, February 12, 2026, adopting most of the tax cuts outlined in the federal One Big Beautiful Bill Act and making those cuts retroactive to 2025. The legislation is projected to reduce state revenues by $155 million for the budget year ending June 30, according to reporting from IdahoEdNews.org. The bill’s passage followed a debate over the timing of the tax cuts, with Governor Little initially proposing a delay until July 1, citing uncertainty regarding the impact on the current budget. However, the Idaho House and Senate passed HB 559 with veto-proof two-thirds majorities in both chambers, overriding the Governor’s concerns and pushing for an immediate rollout to benefit Idaho taxpayers. Supporters argued the immediate effect would allow working Idahoans and businesses to file their taxes with the new rates. The adoption of the federal tax changes comes after President Donald Trump signed the One Big Beautiful Bill into law, delivering on a promise to cut taxes for American families, as noted in Executive Order 2025-05. Idaho’s move to conform to the federal changes aims to simplify the tax code for residents and businesses. In a separate action on Monday, February 16, Governor Little issued an executive order opting Idaho into a federal scholarship tax credit program, further expanding school choice options within the state. The Governor’s office stated Idaho is “proud to be” participating in the program, though details of the program’s implementation were not immediately available. Legislative leaders are anticipating robust revenue streams to offset the projected $155 million loss resulting from the tax cuts, while still maintaining a balanced state budget. The immediate financial impact of the tax cuts remains a key point of observation as the state moves forward with implementation. On Thursday, February 13, the Senate Education Committee introduced a bill to create a $5 million fund to support “high-needs” special education students, covering unusually expensive costs such as full-time aides or American Sign Language interpreters, exceeding $30,000 per student annually. The bill’s progress through the legislature is currently ongoing.